Miamidade Offers Money To Aviation Department To Start Work On Connector
Written by Shannon Pettypiece on December 25, 2003
By Shannon Pettypiece
Miami-Dade County has devised a financing plan to help the Aviation Department start work on a light-rail connector between Miami International and a planned transportation hub.
The county will help the department finance the $270 million connector through a bridge loan so the airport won’t need to come up with funds until 2011. Under the county’s financing plan, put in place this month, the connector will be completed two years before the Aviation Department’s planned 2011 completion date but the department will not have to begin paying its $224.8 million share until 2011.
Other parts of the plan will include lowering the overall cost from original projections by starting construction sooner than the Aviation Department originally planned and by the use of new technology.
A $75 million Florida Department of Transportation grant will also cover a portion of the costs.
The county will also assist the Aviation Department with operating cost of the connector, expected to be $7 million the first year, if the airport does recover to projected levels by 2011. The aviation department is responsible for half of the operating costs.
The $1.3 billion transportation hub, called the Miami Intermodal Center, is described as being similar to New York City’s Grand Central Station where all modes of transportation come together. It will house a rental-car center for 18 companies currently in Miami.
Aviation Director Angela Gittens said she is not satisfied with the plan because the department would still need to come up with $200 million in less than 10 years for a project that does not directly generate revenue for the airport.
Ms. Gittens has postponed or cut several projects from the airport’s $4.8 billion expansion plan since 9/11.
The Florida Department of Transportation, which is overseeing the project, is satisfied with the funding arrangement and confident that the connector will be built as planned, said spokesman Ric Katz.
“The department is satisfied that the money is in place,” he said. “The department has said we are on board with this.”
A financing plan for the connector would allow the transportation department to reach final agreements with rental-car companies for the facility.
“This date is a lot better than when the airport was thinking it could deliver the people mover,” said Florida Department of Transportation consultant Nick Serianni, who has been working with the rental car companies.
Delaying the connector until 2011 would have forced the rental-car companies to pay for transportation between Miami International and the Intermodal Center for five years, which would have been extremely expensive, he said.
The companies still would have to pay for two years of surface transportation between the airport and their new facility, but that was what they initially planned for, Mr. Serianni said.
“Everybody knew that was going to be the case in the original agreement,” he said.
But even with financing for the connector in place, the agreement with the rental-car companies is not finalized, and financial instability in the car-rental industry raises questions about paying for the center.
“The reduced market is putting substantial pressure on the financial feasibility of the consolidated rental-car facility, notwithstanding a reduction in the size of the facility,” County Manager George Burgess wrote on Dec. 4.
Mr. Serianni said the rental-car business has rebounded slower than the airline industry, making a backup financing plan necessary in the event a rental-car user fee is not enough to pay off the federal loan for the facility.
“The recovery has lagged behind the recovery in airport passengers, and no one has been able to put their finger on why that gap exists,” Ms. Serianni said. “We were very, very conservative in how we projected industry recovery.”
Mr. Serianni said final agreements with the companies should be ready by next month.
The Florida Department of Transportation has started construction on the site but has been cautious about how far to progress and how much money to invest without having a funding plan for the connector and final agreement with the rental-car companies.
“The Florida Department of Transportation will feel more comfortable going ahead with the next construction phase,” Mr. Serianni said. “I don’t think FDOT is going to be willing to front-end the continuation of construction if the loan hasn’t been secured.”